1. (10 points) Derive the long-run equilibrium for the dynamic AD-AS model. Assume there are no shocks to demand or supply…

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1. (10 points) Derive the long-run equilibrium for the dynamic AD-AS model. Assume there are no shocks to demand or supply ( t = vt = 0) and in ation has stabilized ( t = t1), and then use the ve equations to derive the value of each variable in the model. Be sure to show each step you follow.

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